Succeeding at Strategic Innovation
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Succeeding at Strategic Innovation

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View the slides from a PDMA webcast given by Larry Schmitt, CEO of The Inovo Group, on April 3, 2014 to a national audience

View the slides from a PDMA webcast given by Larry Schmitt, CEO of The Inovo Group, on April 3, 2014 to a national audience

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Succeeding at Strategic Innovation Succeeding at Strategic Innovation Presentation Transcript

  • Succeeding at Strategic Innovation Larry Schmitt – CEO The Inovo Group www.theinovogroup.com Copyright © 2014 The Inovo Group LLC
  • Outline and Objectives • What we will cover – It’s a fast, VUCA world – The need for strategic innovations – The problems with strategic innovations – What to do about it – A view of your possible future • What you will learn – Steps you can take to make strategic innovation a key competence for your company • The premise, the consequence and the response – Premise: The world is Volatile Uncertain Complex Ambiguous (VUCA) – this requires strategic innovation – Consequence: Strategic innovation is inherently uncomfortable and causes strong emotional reactions – Response: A new paradigm of iteration, building community, socializing, testing and learning is needed. Copyright © 2014 The Inovo Group LLC 2
  • Introduction to The Inovo Group Founded in 2001 Headquarters in Ann Arbor, MI Any industry, any technology, any market Copyright © 2014 The Inovo Group LLC 3 An innovation consulting firm that helps the world’s top companies succeed at strategic innovation. View slide
  • An Increasingly Fast VUCA World Copyright © 2014 The Inovo Group LLC 4 View slide
  • Transformation is Everywhere Copyright © 2014 The Inovo Group LLC 5 Doctor-centric -> Patient-centric Healthcare Energy & Transportation Molecular & singular -> Photonic & shared ‘IT’ Dumb & clueless -> Smart & informed Consumers & Retail Physical & blind -> Mobile & aware
  • The Kodak Story 6 Copyright © 2013 The Inovo Group, LLC 2003 – They knew what was happening! Internal Kodak Strategy presentation Quicktake digital camera - 1994 1993 – Formed Digital Imaging Business1975 – First digital camera Steve Stasson - Inventor
  • The Kodak Story Copyright © 2014 The Inovo Group LLC 7 A Damning Assessment! • Corporate Culture • Non-rational expectation of commitment • Hierarchical firm • Poor change management • Insiders resistance • Change middle to high-level management Yet they couldn’t / wouldn’t do anything about it!
  • Innovation Movement Quality Movement Entering the Era of Strategic Innovation Copyright © 2014 The Inovo Group LLC 8 Adoptionof CommonPractice Not Best practices – Next practices
  • What is Strategic Innovation? Copyright © 2014 The Inovo Group LLC 9 Disruptive Incremental Operational Transformational Newness to the World Newness to the Company Speculative Strategic Sustaining
  • Constant Pressure on the Boundary Copyright © 2014 The Inovo Group LLC 10 Disruptive Incremental Operational Transformational Newness to the World Newness to the Company Sustaining Strategic External Forces External Forces
  • Expanding Your Boundary Copyright © 2014 The Inovo Group LLC 11 Disruptive Incremental Operational Transformational Newness to the World Newness to the Company When you push your organization’s boundaries, does your organization push back?
  • Being Strategic – Company A Copyright © 2014 The Inovo Group LLC 12 Aerospace AutomotiveDifferences • Costs & Volumes • Functionality • Industry structure • Design cycles • … A different set of rules
  • Sustaining vs. Strategic Innovations Sustaining Innovation Properties Strategic Innovation Properties Clear signals Weak signals Internal expertise Lack of expertise Established models & processes Unfamiliar models & processes Can be done ‘solo’ Requires collaboration (internal & external) Quantitative decisions Qualitative decisions High agreement High skepticism Linear & sequential – concept to reality Non-linear & iterative – concept to reality Decisions & actions based on analysis Decisions & actions based on emotion Low VUCA High VUCA Copyright © 2014 The Inovo Group LLC 13 Reasons for discomfort
  • What Does this Mean for You? • The Environment – Diversity & ambiguity of knowledge sources – Weak early signals, lack of evidence – Knowledge-lean decision environment • The Organization – Qualitative decisions – Fuzzy milestones – Uncertainty Copyright © 2014 The Inovo Group LLC 14
  • It’s not us – Company B Copyright © 2014 The Inovo Group LLC 15 The two most anti-innovative words that can be uttered – ‘prove it’ Roger Martin Data, information, facts and analysis are not the complete answer It’s the ‘feelings’ that kill an strategic opportunities
  • The Fundamental Barriers Copyright © 2014 The Inovo Group LLC 16 Emotional responsesDivergent views of the future Hidden assumptionsPoor mental models Preconceived notions
  • What to do about it? Poor mental models Create new and better models Hidden assumptions Surface assumptions, test & learn Divergent views of the future Develop multiple views, be ready for any of them Preconceived notions Identify them, acknowledge them, incorporate them Emotional responses Tell stories, empathize, make an emotional connection Copyright © 2014 The Inovo Group LLC 17
  • How to get there – Be Resilient • Technophilia – Embracing the transformational power of fast moving technology • Situational Empathy – Embracing the transformational force of rapidly evolving human needs and desires • Extreme Agility – enhancing resilience to respond to the unexpected and create the unexpected • Managed Boundaries – controlling what’s inside and what’s outside, what’s porous and what’s a barrier, what’s open and what’s protected. • Risk Adaptation – changing uncertainty into risk and embracing risk (and failure) Copyright © 2014 The Inovo Group LLC 18
  • Healthcare Transformation – Company C Copyright © 2014 The Inovo Group LLC 19 The Plexus electronics manufacturing model really translates well into what we are doing here in terms of how do you take care of somebody front to back. You are talking about vertically integrating all things relative to a very specific focus on orthopedics. At Plexus, we paid attention to every cent and costs were coming down at a tremendous rate. We are structuring operations so that we make money on Medicare. Curt Kubiak – CEO
  • Four Principles • Iterative Deepening – multiple bites at the apple, focusing and shaping, contact over time, multiple- exposure, sub-conscious processing • Community – contact with both internal and external adopters and influencers • Socialization (with both internal and external community) – letting people connect, understand and gain insight using storytelling to think and feel • Purpose built team & project – A journey of discovery and learning done by a skills team with a definitive purpose Copyright © 2014 The Inovo Group LLC 20
  • Iterative Deepening 21 Copyright © 2013-2014 The Inovo Group, LLC
  • Build Community It’s not just Voice-of-the-customer It’s the Mind-of-the-community™ The community is the people who have the knowledge, experience and perspective that you need to know Copyright © 2013-2014 The Inovo Group, LLC 22
  • Empathize & Socialize Copyright © 2014 The Inovo Group LLC 23 Thinking Feeling Team External Experiences Knowledge External Adopters Internal Models StoriesInternal Adopters
  • Purpose-built Team & Project 24 Copyright © 2013 The Inovo Group, LLC Purpose-built Team External Diversity • Skill & Expertise • Perspective • Role & Responsibility • Compatibility • Cognitive Style Internal Diversity • Demographic • Functional • Geographic • Org. Level • Connectivity Purpose-built Project
  • It’s a Journey Copyright © 2014 The Inovo Group LLC 25 Into the unknown
  • The Journey’s Objective – Strategic Learning “The Unknown” • Demand Knowledge – What's really wanted and why? • Design Knowledge – What might be possible and how? • Future Insights – What are the non- obvious, plausible futures? • Organizational Insights – How should/could the organization adopt something new (“say yes”) - and adapt? • Business Model Knowledge – What are the “rules of the game”, and how can (or will) they change? Opportunity Knowledge – What should/could be done …incorporating all of the above Copyright © 2014 The Inovo Group, LLC 26 Business Model Knowledge Future Knowledge Design Knowledge Demand Knowledge Organizational Knowledge Opportunity Knowledge
  • Get the Internal Community Involved Copyright © 2014 The Inovo Group LLC 27 Internal Community External Community Advisory Support Team Core Working Team Extended Influence Team
  • Recognize the Power of Storytelling – Company D Data, analysis, statistics vs. Telling stories, creating emotions Copyright © 2014 The Inovo Group LLC 28
  • Create Effective Working Relationships Copyright © 2013 The Inovo Group, LLC Do it with me Help me do it Do it yourself 29
  • Outstanding Journeys need Outstanding Vessels and Crew Copyright © 2014 The Inovo Group LLC 30 Well constructed – the right organization Well outfitted – the right processes & methods Well provisioned – the right software & systems Well staffed – the right people and skills The right leadership The right mission The right support Your vessel – the organizational structure and the processes, methods and tools available Your crew – the people who are expert in undertaking journeys and the people who are expert in exploiting what is discovered
  • But Sometimes Journeys Need to be Halted Good Reasons* 1. No Pleasant Surprises 2. No Deeper Insights 3. Greater Prospect- Customer-Client Engagement Inspires Little Emotion 4. The opportunity shrinks or narrows the more it is shaped Bad Reasons 1. We’ve never done this before 2. We’ve tried this before and it didn’t work 3. We don’t have the competency 4. We can’t be certain about the outcome Copyright © 2014 The Inovo Group LLC 31 *Credit to Michael Schrage
  • What Does Your Company Want? 32 Copyright © 2013-2014 The Inovo Group, LLC Focus on external knowledge and insights Well-developed framework, methods and tools… …ability to adapt to the varying situations Open access to methods that encourage adoption Balance demand and design – technology and markets Navigation of the critical internal barriers Knowing when to stop and when to push ahead
  • Key Actions for a VUCA World • Embrace discomfort – Acknowledge it, understand its sources, address it head on • Launch well-constructed journeys – Designed to understand the future, complex system • Bring along the communities – Tell stories to connect – be visual • Always question, always test, always learn – Keep iterating, give it soak time, abandon when necessary Copyright © 2014 The Inovo Group LLC 33
  • What Can You do Today? Copyright © 2014 The Inovo Group LLC 34 Investigate the future Advocate discomfort Instigate next practices Initiate journeys For more information and analysis of these topics see the whitepapers available at www.theinovogroup.com Strategic Innovation The Thinking-Feeling Organization Adapting Test & Learn for Internal Startups